Everyone is talking about emerging markets these days and with all this talk we hear China come up a lot. However, David Rubenstein, a founding managing director of The Carlyle Group has made a good point. “If China, by the year 2035, is the biggest economy in the world, how much longer can you call it an emerging market?”

So, what is a true emerging market? CNN’s Andrew Stevens has recently reported on the growing economic might of Vietnam, particularly Ho Chi Minh. The city is booming and has been booming at an average annual growth rate of 7 percent for the past 10 years. More importantly, Vietnam is serious about drawing in foreign business.

We’ve seen electronics manufacturers like Samsung and Canon, big Asian carmakers as well as Ford, and tanning factories that produce shoes for Timberland all move into Vietnam. Why? It’s cheaper. There’s less state intervention when companies follow workplace and environmental standards. Plus, Vietnam has key access to a vast and cheap labor pool across the borders of Cambodia and Laos, according to Stevens.

But what about retail, particularly retail food? Here are some quick facts about retail food and market potential in Ho Chi Minh compared to its Chinese sister city, Shanghai.

What would the demographic makeup of the first McDonald’s in Ho Chi Minh look like?

McDonald’s trade area with an 1100m large radius would include a labor population of 75,544, a female population of 6,228, a male population of 59,125, and a total population of 124,703.

And Starbucks?

Starbucks trade area with a 900m large radius would include a labor population of 74,283, a female population of 5,985, a male population of 56,460, and a total population of 116,320.

And lucky for us, the trade areas of these two retail giants’ first locations in Vietnam overlap.

So what does a trade area analysis reveal?

Discussion Questions
1. Will we see an emergence of foreign brands such as McDonald’s and Starbucks in Vietnam like we have in China? Why or why not?

2. Where in Vietnam would you open the first McDonald’s?

3. Where in Vietnam would you open the first Starbucks?

We’d love to know what you think. Leave your comments below. Thanks. -Eddie

I never had a chance to try this awesome vegetable, Shansu, until I moved to Taiwan. I think I first tried this light and crispy vegetable at one of the many ‘quick stir-fry’ places here. Most dishes in these places go for about 100NTD (3USD) a piece. Shansu is generally slightly more expensive. It usually maxes out at 150NTD per order.

Browsing a Wellcome supermarket one day, I found a package of Shansu for about a third of the price. On another day, I found it at Jason’s for a little bit more than Wellcome. Recently, I’ve been shopping at wet markets and noticed Shansu is cheaper there than at supermarkets. Surprisingly, I also found it at Costco. It was a decent deal since it was cheaper than the supermarkets and wet markets but not quite as fresh.

Even though the price was right, I didn’t buy it owing to the lack of freshness and the bulk quantity was just too much for me. However, just standing there, I wanted to know how many people were buying that pack of Shansu and who these people were. Many Taiwanese restaurants owners have started shopping at Costco since the prices of things like cooking oil and cleaning products are attractive. But are any stir-fry restaurant owners buying Shansu from Costco now instead of straight from the farms or wet markets out of convenience? How far do these owners travel to get to Costco? How much impact has Costco had on wet markets, supermarkets, and the neighboring RT Mart hypermarket?

I had to stop myself. Not enough information and just too little time to be thinking about this kind of stuff on a Sunday night. I would need geocoded demographic data and wealth intensities, Costco’s point of sales data, and third party purchasing data to answer all those questions. Then again, if a Tostitos Asia brand manager also had all this information, he or she would know that I was going to Costco to buy tortilla chips instead of Shansu for my homemade salsa. Things would be much easier if the Wellcome by my house sold tortilla chips. Oh well.

Also interested in learning about restaurants and supermarkets in Shanghai or Chengde? Local demand for tortilla chips, salsa, and sweet potato? Let me know. Thanks. -Eddie

I had a little trouble finding yogurt in Taiwan when I moved here six years ago. At first instinct, I decided to visit the 7-11 across the street from my apartment. With my broken Chinese, I asked where the yogurt was. The cashier pointed me to the back of the store. I was pretty amazed at all the different teas, juices, and soft drinks but I didn’t find any yogurt. The cashier walked by and pointed to a bottle before continuing to stock the shelves behind me with tons of potato chip bags. A tiny bottle with the word Yakult on it was staring at me. “Okay, I’ll try it,” I said. I paid 8NTD (25cents USD) for it then immediately downed it like a shot of tequila. It was sweet, sour, and tasted nothing like regular yogurt or tequila.

Taipei 101 was also new during this time so I took a look. I was taken aback by all the people and amount of restaurants in the food court. Then I spotted Jason’s supermarket hidden in the back corner. Jason’s prices seemed a bit higher than other supermarkets like Wellcome. I looked around real quick and bought a small package of sushi before I left.

A few years later, a friend told me that he was going to pick up some yogurt. “Yakult at 7?” I asked. He quickly replied and told me he was going to Jason’s. We went over there and he showed me a nice four-pack of yogurt for about 150NT (about 5 bucks USD). Nice!

A couple more years rolled by and I started to notice a few frozen yogurt stores popping up. One of the stores, Yofroyo, belongs to my friend. I tried a cup for about 60NT (around 2USD). And from 2009 till now, I’ve tried a few of his competitors. To be honest, they’re all decently tasty but what I really noticed was that business is pretty good. I think we’ll continue to see decent growth in yogurt sales in Taiwan as consumers are becoming more health conscious. Stay tuned for more info on healthy food products in Taiwan.

Want to know about the yogurt market in Dalian, China? Let me know. Thanks. -Eddie

One man. One ball. One love. His name is Lucky. He is determined to bring the fever out in everyone. World Cup fever. Lucky has decided to kick a ball around Beijing’s inner city subway line also known as Line 2. He will unite business people, general consumers, and children. With all the banks, convenience stores, and schools he’ll pass, Lucky won’t run out of money, water, or places to rest.

On his path, Lucky’s efforts will touch the hearts of over 740,000 people in at least 260,000 households. Way to go Lucky!

Feel the same passion as Lucky? Want Lucky to ignite the World Cup spark in your city? He’d be happy with the chance to visit your hometown.

Hypermarkets are a retail store format that has taken China by storm. They’ve given mom and pop shops, convenience stores, and supermarkets a run for their money. Moreover, foreign hypermarkets have grabbed the bull by the horns and fiercely planted their feet in the market.

We saw a nice spurt of growth during the mid-1990s. Then Tesco entered the market in 2004, expanding rapidly with 82 locations in just 6 years. However, many first and second tier cities in China have become saturated with hypermarkets. Will we see similar growth and expansion in lower tier cities over the next ten years?

Additional Questions
1. Will newer players in the market like Jusco be able to compete?
2. What retail store formats will give hypermarkets a challenge?